The Evolution of Banking

A decade ago if you wanted to pay in a cheque or withdraw some money you would simply walk to your local high street bank branch, but this situation is rapidly changing.

More than 2,000 bank branches have closed over the last decade, reducing the total to almost half the number on our high streets in the late 1980s. Banks have replaced them with new banking methods including more ATMs, telephone and online banking, and mobile apps.

Our latest research finds that nine in ten Which? members now have access to online banking, and three-quarters use telephone banking. Yet nearly six in ten say bank closures are a cause for concern so it's important to understand how banks are changing the way they can respond to their customers' needs.

RBS Group has committed £700 million to refurbishing its 600 branches, as well as its IT and new technology capabilities, over the next three years, and from later this year NatWest and RBS customers will also be able to make deposits and pay in cheques at the Post Office's 11,500 branches nationwide.

HSBC has invested £500 million in updating its existing branches, including the introduction of iPads for online banking, improved self-service machines and increasing the number of telephone handsets in branch. And Barclays has also rolled out 8,500 iPads across its 1,600 branches and trialled eight new branches in Asda superstores in February and March 2014.

These changes are helpful to fit in with people's busy lives and adapt to the changing way we can now do our banking, but it's important that customer service doesn't suffer as a result. While it's good to see new technology being developed and used in branches, we also want banks to up their game on answering emails and social media, and ensuring call centre staff have the same level of training and knowledge as staff in branches.

In our latest research we tested to see how well the six biggest high street banks responded via different methods of communication and found that in-branch was the quickest way to get answers compared to phone, email, letter, live web chat and Twitter - although there was a big difference in the time taken between banks and the quality of the service. By phone generally took longer, but you save time by not having to get to the branch, and live web chat, where available, typically took longer than both in branch and by phone.

Branch discussions also gave us the most helpful responses, while email, letter or Twitter queries often took us to the bank's website or details of other communication methods.

With other ways of getting in touch with your bank not quite up to scratch, and four in ten Which? members still preferring to do their banking in person, perhaps there are other options the banks should explore such as allowing consumers to use Post Office branches, opening branches in supermarkets like Barclays, or sharing branches in rural areas as they do in America.

Banks must also ensure their IT systems are fit for modern use, as we've seen several glitches in the past months. And they should stop using high rate telephone numbers for customer helplines.

It's unlikely bank branches will completely disappear from our high streets for many years yet so there is time for banks to respond and show they are doing all they can to put their customers first. However, it's clear that people still like to deal with a real person for their banking, so this should be a key issue for the British Bankers Association and the Payments Council. We want them to work with other organisations, like Which?, to see how banks can adapt for the future but still meet the needs of the customers who still want to use their local branch.

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